Lysosomal proteases perform critical functions in protein turnover and are essential for normal growth and development. Cathepsin P is a member of a newly discovered family of lysosomal cysteine proteases uniquely expressed in rodent placenta (PECs), and is closely related to human cathepsin L. Using the rat choriocarcinoma cell line model, Rcho-1, mRNA for the PECs cathepsins P, M, Q, R, 1, 2 was found to increase in expression during differentiation into a trophoblast giant cell phenotype. By contrast, expression of cathepsin L was not regulated. A specific enzyme assay was developed to show that activity of cathepsin P mirrored mRNA expression during differentiation. Cathepsin P protein co-localizes with cathepsin B, indicating that the enzyme probably functions in the endosomal-lysosomal compartment. This study demonstrates that the PEC genes produce functional proteases that can perform specific placental roles that are probably performed by broader specificity proteases in human placenta. (c) 2006 Elsevier Ltd. All rights reserved.